Corporate Presentation. February 2012

Transcription

1 Corporate Presentation February 2012

2 Disclosure This presentation should be read in conjunction with various filings made by Range Energy Resources Inc. on SEDAR at Certain statements in this presentation contain forward-looking information, including but not limited to operational information. These statements are based on current expectations of reserves, production, and financial results that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates in relation to reserves, production and expenses; the risk of commodity price and foreign exchange rate fluctuations; health, safety and environmental risks; the ability to attract and retain key personnel; and the uncertainty of dealing with government and obtaining regulatory approvals). Due to the risks, uncertainties and assumptions inherent in forwardlooking statements prospective investors in the company s securities should not place undue reliance on them. Note: All dollar amounts in this presentation are in Canadian currency unless noted otherwise. 2

3 Investment Highlights Range is in a major onshore exploration play in the Kurdistan Region of Iraq, with a 24.95% indirect interest (19.9% post- KRG carried interest) in the Khalakan exploration permit Partners plan to drill a well in Q to a depth of 3,520 m in a major anticline identified from seismic The exploration permit, Khalakan, is located between two major discoveries Taq-Taq and Miran Operator has proven expertise in exploration, development and production Third-party review has identified unrisked prospective resources of 133 MMboe net to Range Range is fully funded and has no debt 3

4 Range Background and Developments Range Energy Resources is listed on the Canadian National Stock Exchange (CNSX), symbol RGO In 2009, via an investment in New Age Al Zarooni 2, Range acquired a 24.95% indirect interest (19.9% post-krg carried interest) in the Khalakan exploration permit in the Kurdistan Region $36.6 million raised via private placement in November 2009, May 2011 and July 2011 Range has no debt and has current working capital of $9.4 million Range continues to strengthen its management team as well as its presence in the Kurdistan Region, most recently as a sponsor at the 2011 Kurdistan Oil and Gas conference in Erbil 4

5 Recent developments in the Kurdistan Region Larger IOCs have arrived in the Kurdistan Region including Exxon, Marathon, Repsol and Hess Kurdistan s Ministry of Natural Resources has set a production target of 1 MMbopd by 2015 and estimates that the region has 45 billion bbl and between 3 Tcf and 6 Tcf of gas In November 2011, Genel Enerji/Vallares announced a planned crude pipeline in the Kurdistan Region to link up with the Iraq export pipeline Gulf Keystone updated the estimated oil in place figures for Shaikan to 8 billion bbl of P90 crude and 13.4 billion bbl on a P10 basis, with a mean value of 10.5 billion bbl 5

6 Kurdistan Region Exploration Map Khalakan 6

7 Khalakan Production Sharing Contract Khalakan Production Sharing Contract (PSC) covers 634 km 2 The PSC is located 50 km northeast of the giant Kirkuk oilfield Khalakan is on trend with the producing Taq-Taq oil field and the Miran field which recently had a discovery Khalakan is operated by NewAge (African Global Energy) Gross commitment under the PSC for first well is US$13 million, Range s indirect working interest is 24.95% Partners NewAge (African Global Energy) Ltd Operator of Khalakan Experienced operator focused on upstream oil and gas in the Middle East and Africa with assets in Kurdistan, Congo-Brazzaville, South Africa, and Ethiopia Black Gold Khalakan Ltd. BlackGold Khalakan Ltd. is an investor that is part of an industrial group All work related to the PSC continues to be completed on schedule 7

8 Net Prospective Resources in Khalakan The table below reflects resources net to Range Energy Resources and was reviewed by McDaniel & Associates in June There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be economically viable or technically feasible to produce any portion of the resources Light and Medium Crude (Mbbl) Unrisked Low Estimate Unrisked Best Estimate Unrisked High Estimate Unrisked Mean Estimate Risked Mean Estimate * 24,087 68, ,073 99,120 35,458 Condensate (Mbbl) 2,130 6,872 22,963 10,524 2,488 Natural Gas (MMcf) 114, ,306 1,074, , ,140 Total Oil Equivalent (MMboe) * The prospective resources have been risked for the chance of discovery, but have not been risked for a chance of development. Source: NewAge (African Global Energy) Limited Preliminary Prospectus, September 15,

9 Khalakan-1 (A1) Well Location Operator plans to spud a well in Prospect A1 in Q which will be designated Khalakan-1 A rig has been contracted for drilling from a company that has been particularly active in the Kurdistan Region Target well depth is 3,520 m The well is planned to test the Jurassic and Triassic for potential hydrocarbons and reservoirs Source: NewAge (African Global Energy) Limited Preliminary Prospectus, September 15,

10 Khalakan-1 Exploration Potential Prospect A1 (Khalakan-1) Prospect A1 is the main surface anticline measuring 30 by 5 km at outcrop. Prospect A1 is defined by surface geology, seven dip lines and two strike lines. On current mapping Prospect A1 has an area of structural closure of over 90 km2 and a vertical relief of over 1,500 m at Top Jurassic level and 54 km2 and 1600 m at Top Kurra chine (Triassic) level. There are multiple potential reservoirs from surface downwards, the principle targets being Jurassic and Triassic carbonates. Overall risk is currently assessed by McDaniel at approximately 15 45%. Trap risk is considered to be low for Prospect A1, with the main risk thought to be the efficiency of seal. An exploration well is planned on this prospect for 2012 which will aim to test all potential reservoir targets down to and including the Triassic Kurra chine formation at a structurally crestal location. Khalakan A1 Prospect Dip line D5 (PreSTM) Source: NewAge (African Global Energy) Limited Preliminary Prospectus, September 15,

11 Structure of KRG Production Sharing Contract Total oil produced Net available oil Operations oil 10% government royalty Cost recovery oil up to 40% of net available oil Excess cost oil added back to profit oil Total profit oil Sharing based on a range of a 30/70 percent split to a 15/85 percent split. Oil profit split based on the factor R (cumulative revenue divided by cumulative cost). Typically, when R reaches 2, the profit will be 85/15 percent in favor of the KRG. 15% 85% Contractors (gross) 12% Foreign contractors (gross) 3% KRG KRG public company % % Foreign contractors net retained KRG social programs 11

12 Khalakan Ownership Structure BlackGold Khalakan 50.1% interest in NAAZ % indirect interest in GPK Range Energy Resources 49.9% interest in NAAZ % indirect interest in GPK New Age Al Zarooni 2 40% of GPK Operator NewAge (African Global) 40% of GPK Gas Plus Khalakan PSC signed on June 11, % interest of Khalakan Kurdistan Regional Government 20% carried interest Khalakan 12

13 Current Shareholder Base Major shareholders Gulf LNG RAB Capital Salida Capital MacKenzie Financial Front Street Capital US Global Investors Issued and Outstanding 232,277,840 Options 4,262,500 Warrants 70,472,000 Fully Diluted 307,012, ,500 $0.35 Jul 8, ,000,000 $0.30 Jan 7, ,500,000 $0.30 Nov 17, ,800,000 $0.15 May 18, ,072,000 $0.15 May 18, ,100,000 $0.15 Jul 26,

14 Board of Directors Toufic Chahine, Chairman and interim CEO Chairman and operations manager of a Middle East importer and exporter of grain products. Senior officer with Crest Group evaluating oil & gas investments Roger Bethell Mr. Bethell has worked as a geological consultant on a number of international projects which include offshore Vietnam, Kazakhstan, the Delta Project in Nigeria and projects in Alberta and Saskatchewan, Canada Allan Bezanson Mr. Bezanson is the Managing Partner of Cornerstone Capital Partners, a Toronto-based investment bank specializing in structuring and facilitating private equity investments in energy, resources and early stage technology sectors. Previously, he was President and Partner at Oballan Capital and Osprey Capital Pamela Powers Officer with Gulf America LNG, LLC and the Executive Vice President and CFO of Crest Investment Company, a US-based consortium of companies investing in and operating global projects. She holds both CPA and Attorney designations. Michelle Upton Vice President of Crest Investment Company, a US-based consortium of companies investing in and operating global projects. 14

15 Management updates With the goal of improving governance, the Board has implemented several measures to enhance the transparency and accountability of company operations including: creating a compensation committee and expanding the audit committee strengthening technical and commercial management reviewing all opportunities in the area (no agreements have been reached with any parties) evaluating the opportunity to be listed on the TSX-V given that most of Range s peer group of Kurdistan exploration companies are now listed on that exchange 15